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Table of Contents
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Motor Vehicle Board
Truth in Mileage Act
The industry was first regulated in 1945. The Motor Vehicle Dealer Board was created by the Colorado General Assembly in 1971. The Board consists of nine members who have been residents of the state for at least five years: three licensed new vehicle dealers, three licensed used vehicle dealers, and three members from the public at large. The public members cannot have a present or past financial interest in a motor vehicle dealership. All of the members are appointed by the Governor for three-year terms
The Board is empowered to promulgate, amend and repeal reasonable rules, regulations and provisions for governing the industry.
The Board can issue or deny license applications for any motor vehicle dealer, used dealer, wholesaler, wholesale auction dealer or salesperson. It can investigate any alleged or suspected violation by any dealer, wholesaler, wholesale auction dealer or salesperson. The Board can order an administrative hearing when it believes there is probable cause that a violation of law occurred. It can also suspend and revoke the license of any motor vehicle dealer, wholesaler, wholesale auction dealer or salesperson after giving due notice and conducting an administrative hearing. The Board may also impose a fine of up to $10,000 for each separate offense.
The Board is authorized to determine license fees.
The Board meets monthly to transact normal business, review new applications and conduct hearings.
Motor Vehicle Dealer Section
License Types & Requirements
Each dealer, and salesperson license is to be posted in a conspicuous place in the dealer's place or places of business.
Each license is separate and distinct. It is a violation of law for any person to exercise any of the privileges granted under a license that such person does not hold, or for any licensee to knowingly allow such an exercise of privileges by someone else. For example, a person licensed as a wholesaler cannot sell a vehicle to a retail customer. A wholesaler involved in such a sale would be illegally exercising the privileges of a used dealer.
Bonds must remain in force throughout the licensed period. Similar to the license renewal process, bonds are renewed annually with the license renewal. The renewal may be done through a continuation certificate issued by the bond company.
New and used vehicle dealers, wholesalers, and wholesale auction dealers are required to have bonds in the amount of $30,000. Salespersons, small trailer dealers and buyer agents are required to have bonds in the amount of $5,000.
If someone suffers loss or damage because of fraud or fraudulent representation made by a licensed dealer or one of the dealer's salespersons, that person can file a claim or civil suit against the dealer, the salesperson and the surety companies that bonded them. The right of a person to recover for loss or damage against the dealer or the salesperson is not limited to the amount of their bonds. In other words, the dealer or salesperson can be, personally liable for any proven claim or judgment in excess of the bond. Also, if a surety pays out against a claim they will seek reimbursement from the licensee.
New Motor Vehicle Dealer
1. Receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under the order of any court.
2. Public officers performing their official duties.
3. Employees of dealers.
5. Persons engaged in the selling of a new fire truck.
6. Motor vehicle auction dealers.
Used Motor Vehicle Dealer
1. Receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under the order of any court.
2. Public officers performing their official duties.
3. Employees of used motor vehicle dealers.
5. Lending institutions, such as banks or finance companies, which sell no more than 12 repossessed vehicles in any one year. (The lending institutions or secured parties shall not realize any moneys in excess of the outstanding balance secured by the loan or security agreement, plus costs of collection.)
6. Persons who sell or exchange no more than 4 motor vehicles that are collector's items as defined in Colorado law.
7. Motor vehicle auction dealers.
8. Tow company operators.
1. A complete application submitted no later than the 15th of the month to be considered at the regularly scheduled meeting of the Dealer Board the following month. The complete application includes:
The original application (DR 2109)
The addendum DR 2109-B)
Financial statement (DR 2114) and supporting documents
Partnership agreements or articles of incorporation or organization
Place of business affidavit (DR 2044)
Dealer plate affidavit (DR 2630)
Proof of state sales tax license, or completed application (CR 100)
The payment of the appropriate fees.
A passing score of 100% on the mastery exam.
A $30,000 surety bond on the approved form. The applicant's name and DBA must appear exactly as licensed. It must be signed by the owner, a partner, an officer of the corporation or LLC manager.
If applying for a franchised license, a franchise agreement on manufacturer's letterhead.
Mail or carry the application, fee (check payable to the Colorado Department of Revenue), proof of passing exam score and bond to: Dealer Section, State Motor Vehicle Division, Denver, CO 80261- 0016.
Liability Insurance Requirement
Grounds for Denial, Revocation or Suspension of a Dealer's or Wholesaler's License
1. Unfitness of character or record of a licensee or applicant relating to licensing, criminal or financial history or current status.
2. Making a material misstatement in an application for license.
3. Violating any of the terms and provisions of dealer law or Board rules or regulations.
4. Having been convicted of or pled nolo contenders to any felony or any crime pursuant to article 3, 4, or 5 of Title 18, C.R.S. (felony or criminal misdemeanor), or like crime pursuant to federal law or the law of any other state. A certified copy of the judgment of conviction by a court of competent jurisdiction shall be conclusive evidence of such conviction. A dealer, 'wholesaler, or officer/director/ stockholder of a corporation, or LLC member/manager who is convicted of any felony or any crime, must give the Board written notice of such conviction within 30 days after receiving final judgment. The licensee is responsible for providing complete information including copies of final judgments and pre-sentence reports.
5. Defrauding any buyer, seller, salesperson or financial institution to such person's or institution's damage.
6. Failing to perform - either intentionally or negligently - any written agreement with any buyer or seller.
-A dealer must give written notice of acceptance or rejection of a purchase order or agreement to the buyer within I working day on a cash deal, 3 working days on a consignment sale, or 5 working days on a finance deal. When a purchase order or agreement is subject to a dealer's acceptance, the order or agreement shall state this in a conspicuous manner.
-The selling price of a motor vehicle cannot be increased after the contract has been accepted by the dealer unless otherwise specified on the contract.
-A dealer must clearly indicate on the customer's contract when a motor vehicle is sold 'as is' and without a warranty, or as a "tow away" , not to be driven.
-A check or draft by a purchaser or dealer is considered a written agreement.
7. Failing or refusing to furnish and keep in force any required bond.
8. Making a fraudulent or illegal sale, transaction or repossession.
9. Willfully misrepresenting, circum- venting, concealing or failing to disclose through whatever deception or device, any of the material particulars required to be stated or furnished to the buyer. A copy of the completed contract form and all other forms and documents required by law shall be given to the purchaser at the time of consummation of the sale of a motor vehicle. A dealer or wholesaler shall disclose on the contract form when a motor vehicle is known by the dealer or wholesaler to have been rebuilt from salvage or has sustained any damage.
10. Intentionally publishing or circulating any advertising which is misleading or inaccurate in any material particular or which misrepresents any motor vehicle products sold or furnished by a licensed dealer.
11. Knowingly purchasing, selling, acquiring or disposing of a stolen motor vehicle.
12. Engaging in the business of a new or used dealer without maintaining at all times a principal place of business during reasonable business hours.
13. Employing an unlicensed salesperson.
14. Willfully violating any state or federal laws respecting commerce or motor vehicles or any rules or regulations respecting commerce or motor vehicles adopted by any licensing or regulating authority pertaining to motor vehicles.
15. Representing or selling as 'new' any motor vehicle that the dealer knows is a used motor vehicle.
16. Violating any state or federal statute or regulation dealing with odometers.
17. Selling to a retail customer a vehicle which is not equipped or in proper condition and adjustment unless such vehicle is sold as a 'tow away', not to be driven.
18. Committing a fraudulent insurance act.
A wholesaler's or wholesale auction dealer's -license may also be denied, suspended or revoked for selling, offering, or attempting to negotiate the sale or exchange of an interest in motor vehicles to persons other than new or used dealers, wholesalers or wholesale auction dealers.
-Any transfer to an individual of 10% or more of the stock or ownership interest in any corporation or limited liability company holding a license must be reported to the Board immediately.
-Any change in the name or trade name of the business must be reported by submitting a written notice to the Board at least 10 days prior to the change.
-Any change in operating entity of a licensee shall require a new application, fee and approval-by the Board. A change of entity means a change of business type - i.e., from a proprietor, partnership or corporation to a different proprietor, partnership or corporation.
-Any change in the site or location of a principal place of business shall immediately be reported to the Board in writing.
-Any change, addition, cancellation or loss of a franchise shall immediately be reported to the Board.
-Any time a salesperson is discharged or leaves a dealership, that dealer must immediately return that person's license to the Board. It is unlawful for that person to act as a salesperson, until he or she is employed at another dealership and a Change of Employer Notification has been submitted to the Board.
A dealer shall obtain an off-premise permit to offer, display and sell motor vehicles away from the dealer's licensed place of business. A completed Off-Premise Permit Application (DR 2043) must be submitted along with the fee prior to the event and shall list the location and date(s) of the sale. The permit shall be available for inspection at the sale. No off-premise sales shall exceed six days, except for the National Western Stock Show, the Colorado State Fair, and the Metro Denver Auto Dealers Association's annual Denver Auto Show. The permits for these 3 events cannot exceed 20 days. Consecutive permits for the same location are not allowed. Off-premise permits do not negate the Sunday Closing Law.
'Principal place of business' means a site or location devoted exclusively to the business for which
a dealer is licensed and businesses incidental thereto. It must have enough
space to permit the display of one or more new or used vehicles and have a
permanent enclosed building or structure large enough to accommodate the
dealer's office and provide a safe place to keep the books and records of the
business. The books and records of each dealer, excluding financial statements
and tax returns, shall be open to inspection Monday through Friday between 9 AM
and 5 PM by the Board and its agents and representatives with cause, including
ongoing investigation, compliance audit, sworn complaint, and order of the Board. All records, including financial
records and tax returns, shall be provided to the Board upon a subpoena for
The principal place of business and additional locations of the dealer shall display a permanent sign with letters at least 6 inches high, clearly visible to the major avenue of traffic. The sign shall clearly display the licensed name of the business.
Other Location Requirements
The building or structure required to be on the principal place of business shall have electrical service and adequate sanitary facilities. 'Adequate sanitary facilities" means a permanent sewer hookup, cesspool or septic tank with leaching field, or portable chemical toilet.
-The site must comply with all local zoning ordinances.
-In most cases, a room in a hotel, rooming house, apartment structure or part of any single or multiple unit dwelling cannot be considered a principal place of business, unless the entire ground floor is devoted principally to and occupied for commercial purposes. The office of the dealer must be located on the ground floor.
-A dealer's license can be suspended or revoked if the principal place of business or additional locations are not owned or leased by and not actually occupied by the licensed dealer.
Motor Vehicle Salesperson
1. A complete application must be submitted.
2. The payment of the appropriate fee.
3. A passing score of 100% on the mastery exam.
4. A $5,000 surety bond on the approved form.
5. Mail or carry the application, fee (check payable to the Colorado Department of Revenue), proof of passing exam score and bond to: Dealer Section, State Motor Vehicle Division, Denver, CO 80261- 0016.
Salespersons are not allowed to offer, negotiate or sell vehicles unless applications, complete in every respect, bonds, fees and records of satisfactory completion of written examinations have been submitted to the Board. Postmark or date/time stamp shall be evidence of submission. Any person who has been the subject of disciplinary proceedings before the Board within the past 5 years shall not start selling or negotiating until the Board has reviewed and approved the application.
Grounds for Denial, Revocation or Suspension of a Motor Vehicle Salesperson's License
1. Unfitness of character or record of licensee or applicant relating to licensing, criminal or financial history or current status.
2. Making a material misstatement on an application for license.
3. Failure to comply with any provision of dealer law or any rule or regulation adopted by the Board.
4. Engaging in the business without having a bond in force.
5. Intentionally publishing or circulating any advertising that is misleading or inaccurate in any material particular or which misrepresents any motor vehicle products sold or attempted to be sold by such salesperson.
6. Engaging in any fraudulent business practice.
7. Selling, offering, or attempting to negotiate the sale or exchange of motor vehicles for any dealer for which a salesperson is not licensed.
8. Representing oneself as a salesperson for any dealer when not so employed or licensed.
9. To have been convicted of or pled nolo contenders to any felony or any crime pursuant to article 3, 4 or 5 of Title 18, C.R.S. (felony or criminal misdemeanor), or like crime pursuant to federal law or the law of any other state. A certified copy of the judgment of conviction by a court of competent jurisdiction shall be conclusive evidence of such conviction in any hearing. A salesperson who is so convicted, must give the Board written notice of such conviction within thirty (30) days after receiving final judgment of the court. Licensee is responsible for providing complete information including copies of final judgments and pre-sentence reports.
10. To have knowingly purchased, sold or otherwise acquired or disposed of a stolen motor vehicle.
11. Employing an unlicensed salesperson.
12. Violating any state or federal statute or regulation dealing with odometers.
13. Defrauding any retail buyer to that person's damage.
14. Representing or selling as 'new' any motor vehicle that the salesperson knows is a used motor vehicle.
15. Selling to a retail customer a vehicle which is not equipped or in proper condition and adjustment, unless such vehicle is sold as a tow away, not to be driven.
16. Willfully violating any state or federal law respecting commerce or motor vehicles or any lawful rule or regulation respecting commerce or motor vehicles adopted by any licensing or regulating authority pertaining to motor vehicles.
17. Improperly withholding, misappropriating, or converting to one's own use any money belonging to customers or other persons, received in the course of employment as a motor vehicle salesperson.
Dealers are responsible for their sales staff when a salesperson leaves a dealer, that dealer must confiscate the license and return that salesperson's license to the Dealer Section. A new bond is not required when a salesperson changes dealerships during the license year.
Multiple Dealerships/Additional Licenses
A $5,000 surety bond is required of all buyer agents. It must be on a form approved by the Colorado Attorney General. All bonds must be renewed annually. The renewal may be done through a continuation certificate issued by the surety.
It is unlawful for buyer agents to:
1. Make a material misstatement on an application for a license.
2. Willfully fail to perform any written agreement.
3. Defraud any buyer, seller, motor vehicle salesperson, or financial institution.
4. Intentionally enter into a financial agreement with a seller of motor vehicles for the buyer agent's own benefit.
5. Coerce any motor vehicle dealer into providing installment financing with a specified financial institution.BACK TO TOP OF PAGE Manufacturer's Certificate of Origin
(MCO) This document is required from a manufacturer for each vehicle produced. It specifies the vehicle make, model, body type, date of manufacture, or date of transfer from manufacturer, model year, shipping weight, 17-character Vehicle Identification Number (VIN), and manufacturer's invoice number. If the vehicle is a truck or commercial vehicle, the gross weight rating is also specified. The number of cylinders of the engine and the S.A.E. horsepower rating are included when the vehicle is self-propelled. The MCO provides space for the name and address of the dealer to whom the vehicle is being transferred and an assignment form for transfer from dealer to buyer. The assignment forms have a place for the notation of lien information. Mao’s must be printed on authorized secure banknote paper. BACK TO TOP OF PAGE Monroney Label BACK TO TOP OF PAGE Supplemental Dealer Label
(Dealer Addendum) BACK TO TOP OF PAGE Transfer of Title - New Vehicles The buyer of a new vehicle must be given: -Manufacturer's Certificate of Origin assigned to the purchaser and Dealer's Bill of Sale if all the assignments are full BACK TO TOP OF PAGE Disclosures Required as Part of a Motor Vehicle Sales Contract OR Dealer has agreed to arrange financing for you and you agree to buy the motor vehicle if financing-can be arranged at an interest rate that does not exceed % annual percentage rate. This annual percentage rate must-be agreed upon by both you and the dealer. Also, you are entitled by law to a complete, written disclosure of all the loan terms and the contract is not binding until you receive such a disclosure and accept the loan terms disclosed. BACK TO TOP OF PAGE Used Motor Vehicles BACK TO TOP OF PAGE FTC Buyer's Guide Since 1985, the Federal Trade Commission's Used Car Rule has required that dealers prominently and conspicuously display the 'Buyer's Guide' on every used car or light truck offered for sale. 'Vehicle' includes all motorized vehicles with a gross vehicle weight of under 8,500 lbs., a curb weight under 6,000 lbs., and less than 46 square ft. of frontal area. Motorcycles are excluded. Rule highlights include: BACK TO TOP OF PAGE Transfer of Title - Used Vehicles BACK TO TOP OF PAGE Lease Vehicles BACK TO TOP OF PAGE Advertising of Lease Vehicles BACK TO TOP OF PAGE Advertisement - Inclusion of Dealer Name. BACK TO TOP OF PAGE Bait & Switch Advertising BACK TO TOP OF PAGE Truth In Lending Act BACK TO TOP OF PAGE Title Law
'Dealer Resale' titles do not require sales tax to be paid. A dealer resale title cannot be obtained on any vehicle subject to any lien. Any licensed Colorado dealer or wholesaler may obtain a 'quick' title in the licensed name of the dealership or wholesaler.Vehicles titled out-of-state do not require the dealer to obtain a Colorado Certificate of Title as long as the title does not prohibit separate reassignments. The first Colorado dealer must complete the 'Verification of VIN' (DR 2087) and "Colorado Dealers Statement Concerning an Out-of-State Vehicle" (DR 2418). BACK TO TOP OF PAGE Salvage Certificate of Title This document is issued by the State Motor Vehicle Division to indicate ownership of a salvage vehicle. A salvage vehicle is one that has been damaged by collision, fire, flood, accident, trespass or other occurrence - excluding hail damage - to the extent that repairing it for legal operation on the highways exceeds the vehicle's retail fair market value immediately before the damage occurred, as determined by the vehicle owner or the insurance company. These vehicles cannot be transferred on a Dealer's Bill of Sale (DR 2407). BACK TO TOP OF PAGE Mechanic's Lien A garage or mechanic holding a vehicle for a mechanic's or storage lien may make application for title by following the steps in the mechanics and storage hen procedure 38-20-116 C.R.S. BACK TO TOP OF PAGE Possession Documents
Dealer PlatesNew and renewing dealers must submit a Dealer Plate Affidavit to the Dealer Section. Upon verification of the information, the dealership will be mailed an authorization certificate to take to the - county clerk's office to purchase the number of plates allowed. BACK TO TOP OF PAGE Full-Use Plates BACK TO TOP OF PAGE Demonstration Plates BACK TO TOP OF PAGE Rules Governing Dealer Demonstration Plate Use Demo plates cannot be loaned to charitable organizations for use in charitable activities or parades. Also, they cannot be loaned or given to any athlete, coach, celebrity, accountant or lawyer other than for the purpose of a test drive. Dealer demo plates cannot be displayed on vehicles that are used by the dealership for any commercial purpose. Such commercial vehicles shall be titled and registered in the name of the dealership. Commercial vehicles shall include, but not be limited to: delivery vehicles, tow vehicles, vehicles with signs advertising the dealership, and service loaners. BACK TO TOP OF PAGE In-Transit Plates BACK TO TOP OF PAGE Depot Plates BACK TO TOP OF PAGE Temporary Registration Permits It is not necessary to have a valid driver's license to purchase a vehicle. However, any person driving the vehicle from the dealer's lot must have a valid driver's license. Temporary registration permits feature a 3-part registration stub that must be completed by the dealer and distributed as follows: 2. The white copy is mailed on the date of issuance to the Traffic Records Section, Motor Vehicle Division, 1881 Pierce St., Lakewood, CO 80214 3. The yellow copy must be retained by the dealer. Temporary registration permits are serially numbered and charged to the purchasing dealer. Dealers shall not loan, give, borrow, sell, exchange or issue permits for or with another dealer, individual, business, company or corporation.
Return Registration and Plates to CustomersDealers and salespeople are reminded that when they take a vehicle in on trade, they are to return the registration and plates to the customer. The plates are the property of the owner and do not transfer with the vehicle. A customer registering a new vehicle may receive some credit for the old plate and registration. Not only will customers want credit for their old plates, they may need the registration as proof of ownership taxes paid for their income tax records. BACK TO TOP OF PAGE Truth In Mileage Act Congress enacted the federal odometer law in 1972 to prohibit tampering with odometers and to establish safeguards for the protection of consumers. In 1986, the Truth in Mileage Act enhanced the paper trail of odometer readings by requiring an odometer disclosure upon each transfer of title of a motor vehicle. This also includes motor vehicle lessors and auctions. Records of vehicle transfers and odometer statements must be retained for 5 years. This federal law makes it unlawful for any person: 1. To advertise for sale, sell, use, install or have installed, any device that causes an odometer to register an inaccurate mileage. 2.To disconnect an odometer. 3.To reset or alter the odometer of any motor vehicle with intent to change the mileage. 6. To fail to issue a disclosure statement or to issue a false statement. 7. If a dealer or distributor fails to receive a complete mileage disclosure statement. The following types of motor vehicles are exempt from the Truth in Mileage Act: BACK TO TOP OF PAGE A Secure Power of Attorney Form The DR 2174 may be used in cases where the original title has been lost or the lien needs to be released on a trade-in by the seller. This document permits the buying dealer to gain a duplicate title without having to re-contact the original owner for a mileage affidavit. BACK TO TOP OF PAGE Cash Reporting Rule BACK TO TOP OF PAGE Canceling A Contract Within 72 Hours BACK TO TOP OF PAGE "As Is" and "Tow Away' The term 'as-is' should not be confused with the term 'tow away.' 'Tow away' is a very specific term reserved for motor vehicles that cannot pass state safety standards. Such vehicles must be sold as 'tow away.' Dealers cannot issue temporary permits for 'tow away' vehicles or allow them to be driven off the dealership's premises. Moreover, dealers must indicate on the buyer's order the extent of the vehicle's safety problems to bring them to the attention of the certified law enforcement VIN inspector in subsequent roadworthiness inspections. BACK TO TOP OF PAGE Deceptive Trade Practices While dealers, wholesalers and salespersons should be familiar with the entire Consumer Protection Act, several sections of that Act are especially relevant to the motor vehicle industry. First and foremost among the deceptive trade practices is 'bait and switch," which is discussed in detail in Part IV. In addition to bait and switch, the following deceptive practices are also worth relating: 1. Representing goods as original or new 'when it is known, or should be known, that they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand. 2. Advertising goods, services, or property with intent not to sell them as advertised. 6. Failing, in connection with any solicitation, to clearly and prominently disclose immediately adjacent to the description of any item or prize received by any person the actual retail value of each item or prize to be awarded. The actual retail value is the price at witch substantial sales of the item were made in the trade area within the last 90 days, or if no substantial sales were made, the actual cost of the item or prize. Whenever the actual cost is less than fifteen dollars per item, a disclosure that actual cost to the provider is less than $15.00 must be provided. 7. Refusing or failing to obtain all government licenses or permits (see discussion on unlicensed dealers at end of this section). BACK TO TOP OF PAGE Disclosures Required Part of the contract for the retail sale or lease of a motor vehicle, other than a retail installment sales contract subject to the Uniform Commercial Credit Code, must include either the Disclosures Required As Part of a Motor Vehicle Sales Contract or disclosures required by the Federal Reserve Board's Regulation M. The disclosures are to be given to the buyer or lessee at the time the sale or lease is completed. Board regulations require dealers, wholesalers and auction dealers to disclose on the contract form when a motor vehicle is known by the dealer, wholesaler or auction dealer to be a salvage vehicle. This requirement can be satisfied by using a 'Rebuilt From Salvage Disclosure" affidavit (DR 2710). Disclosure must also be made when it is known that a vehicle is to have sustained material damage at any one time from any one incident. BACK TO TOP OF PAGE Emissions
Ten Colorado counties make up the Automobile Inspection and Re-adjustment (AIR) Program area in Colorado: Adams, Arapahoe, Bolder, Denver, Douglas, El Paso, Jefferson, Larimer, Pitkin and Weld.New vehicles sold on an MCO or MSO are exempt from emission testing requirements for the first 4 model years or until there is a change in ownership, except for diesel powered vehicles which have a 2-year exemption. However, these new vehicles are still required to have an emissions window sticker except for diesel powered vehicles. As of October 1, 1994, before delivering new vehicles to buyers within the AIR program area, dealers must have an 'exempt' emissions sticker affixed to the vehicle's windshield. 1982 model year and newer vehicles are to be tested every 2 years. 1981 and older model years vehicles are to be tested yearly.
-The seller does not warrant that the vehicle will comply with the emissions requirements.-The purchaser is responsible for complying with the emissions requirements prior to registering the vehicle. BACK TO TOP OF PAGE Financing Approval BACK TO TOP OF PAGE Colorado Lemon Law If a new vehicle has a defect that substantially impairs its use and market value within one year following purchase, and the defect is not repaired after a .reasonable number of attempts,' a court may order the manufacturer to replace the vehicle or refund the purchase price less a reasonable allowance for use of the vehicle. Under law, a 'reasonable number of attempts' to repair applies when the same defect exists after it has been subject to repair four or more times within the first year after the date of original delivery. It also applies when the vehicle is out of service for repairs for a cumulative total of 30 or more business days during the warranty term or one year after purchase, whichever comes first. Defects, such as rattles or squeaks, which do not substantially impair the use and market value of the vehicle are not covered. Also, defects that result from abuse, neglect or unauthorized modifications or alterations of the vehicle by a consumer are not covered. Prior to suing a manufacturer for a refund or a replacement vehicle, the consumer must first send a written notice of defect by certified mail to the manufacturer giving them a chance to repair it and go through the manufacturer's consumer arbitration program, if one exists.
Motor Vehicle Repair ActThis law deals with the issues of consumers and motor vehicle repair. Most retail dealers that perform repairs are subject to this Act. Only repairs promised as part of the sale of a motor vehicle fall under the jurisdiction of the Dealer Section. Filing a complaint when repairs are not associated with the sale of a vehicle is done at the District Attorney's office in the county in which the repairs were made. BACK TO TOP OF PAGE Repossession The complex laws concerning repossession apply to both vehicle sales and leases. A creditor does not automatically have the right to repossess a vehicle upon default by a consumer in a credit transaction. The creditor needs to create a security interest in the motor vehicle by filing a lien on the vehicle in the county where the debtor resides. Ten days after a debtor has failed to make the required payment, he or she is considered to be in default. The creditor is required by law to give the debtor a written right to cure notice, which can either be delivered or mailed to the debtor's residence. Sending the right to cure notice by regular mail and obtaining a certificate of mailing from the post office is recommended in order to document the date it was sent.
The right to cure notice must state the name, address and telephone number of the creditor, a brief description of the credit transaction, the debtor's right to cure the default, the amount of payment and the date by which the payment must be made to cure the default. The debtor has 20 days in which to cure the default. The creditor cannot accelerate the maturity of the unpaid balance or repossess during this period. If the debtor cures the default within 20 days, the debtor's rights are restored under the agreement as though no default had occurred. If the debtor does not respond, the creditor may then move to repossess. Only one right to cure notice is required in a 12-month period.Local law enforcement agencies must be notified within one hour before or after the repossession occurs. Dealers should ensure that their repossessors are bonded through the State Attorney General's office. Employing an unbonded repossessor may make the dealer liable for the actions of the repossessor. BACK TO TOP OF PAGE Sunday Closing Law No dealer or employee shall keep open or operate, or assist in keeping open or operating, any premise, open or closed, for the purpose of selling, bartering or exchanging or offering for sale, barter, or exchange any motor vehicle, whether new, used or secondhand, on the first day of the week commonly known as Sunday. This law does not apply to the following: -The opening of an establishment or place of business for other purposes, such as the sale of petroleum products, tires, automobile accessories, or BACK TO TOP OF PAGE Unlicensed Dealer or Salesperson It is unlawful for any person to act as a new or used vehicle dealer, wholesaler, motor vehicle auction dealer, or salesperson unless that person has been licensed as such.
Any person who willfully violates this law commits a class 3 misdemeanor, and upon conviction, shall be punished by a fine of up to $2,500 for each vehicle sold. The Consumer Protection Act also states that failure to obtain all government licenses, or permits required to perform the services or to sell the property, is a deceptive trade practice.The information presented here is intended to be used as a. guide. While every effort has been made to make the information in this manual accurate and helpful , it is not intended to be a substitute for the statutes and regulations or other legal documents.
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